STOCKS NEWS EUROPE-Aberdeen up as update confounds bearish bets

Shares in Aberdeen Asset Management (Other OTC: ABDNF - news) rise 5.7 percent to the top of Britain's FTSE 100 index as investors welcome cost cuts at the asset manager and a slowdown in the pace of outflows, confounding hefty bearish bets on the stock.

Despite a largely downbeat update, traders and analysts highlight the planned cost cuts and a slowdown in outflows in March as two positives for the stock, which was heavily "shorted" by speculative investors in recent months in anticipation of poor results, Markit data shows.

Aberdeen was the sixth most shorted stock on the FTSE ahead of the update, with 22 percent of its shares available to be borrowed out on loan, a proxy for short selling. This corresponded to 5 percent of the group's share capital.

Short sellers borrow a security and sell it, betting they will be able to buy it back at a lower price before returning it to the lender, pocketing the difference. If instead the price rises sharply, some short sellers rush to buy the stock to close their position, exacerbating the move up.

Aberdeen's shares have gone through their full-day volume average at 0905 GMT, compared to FTSE volume of a fifth of the index's own three-month average.

Concerns over emerging markets have pegged the stock back so far this year, and despite Tuesday's bounce it remains down 17.3 percent in 2014.

Reuters messaging rm://francesco.canepa.thomsonreuters.com@reuters.net

simon.jessop.thomsonreuters.com@reuters.net